Brexit fears are destroying commercial property investments

The "Walkie Talkie" tower
in the City of London. Office developments have slowed down in
the wake of Brexit uncertainty.Getty
Images

Britain's upcoming referendum on its EU membership — known as
"Brexit" — has almost completely killed overseas investment in
commercial property, according to a survey released on Thursday
by the Royal Institution of Chartered Surveyors
(RICS).

Only 5% of RICS firms reported an increased demand from
international investors for British commercial property in the
last quarter — compared with 36% from the same period last year.

London was hit hardest, with 80% of respondents agreeing that
Brexit uncertainty had curtailed overseas investment in the
capital.

The report added that the most likely beneficiaries of a Brexit
would be Paris, Frankfurt and Dublin as many corporations would
move their offices to remain in the EU trading bloc.

Economists have struggled to predict how Britain will be affected
in the wake of a Brexit, and this is reflected in the polls, with
neither the "Leave" or "Remain" campaign taking a significant
lead in the last month.

The RICS report concluded that despite the investment slowdown,
the UK would probably be fine even if a Brexit happened:

"London is likely to remain a magnet for investment, but it is
harder to anticipate how other major cities and the devolved
nations will be affected. Scotland’s pre-referendum slow-down in
commercial activity still saw degrees of investor appetite and
occupation, and witnessed a bounce-back from held back investment
and occupation decisions."